Intellectual Property

January 8, 1985

In a small ceremony yesterday at the Copyright Office, three companies filed the first applications to register designs for semiconductor chips. Last year, Congress enacted legislation that will now protect the developer of a new chip from illicit copying. The chip, with its thousands of intricately etched electronic circuits, represents a new kind of intellectual property. The legislation represents the first expansion in a century of the legal protection of intellectual property in this country, as its House sponsor, Rep. Robert W. Kastenmeier, observed.

The semiconductor chip had been in limbo between the traditional patent and copyright laws. It wasn't entitled to copyright protection, the lawyers said, because it wasn't written and it wasn't a work of art. Nor did it qualify for patenting, because no chip design represents a wholly new principle. Each is an incremental improvement on the last. Rather than trying to bend the older laws around a new product, Congress created protection specifically addressing the question that this rapidly expanding technology poses.

Piracy has turned into a serious threat to the companies investing most heavily in advancement of the field. The semiconductor industry complained that it spent heavily to design improved chips, only to find competitors disassembling them -- the term is reverse engineering -- and putting on the market copies that, bearing none of the design costs, could be sold cheaply. But Congress was careful to try to strike a balance between protection for the original designers and latitude for the competition. The law permits reverse engineering, if it is done in the process of producing a better version of the chip.

The new technologies of information processing and of biological engineering are developing other kinds of intellectual property that do not fit into the familiar categories, and yet deserve some measure of protection from the pirates. In the legislation now going into effect, Congress limited itself carefully to one specific case, the chip. But it set a precedent for wider and more flexible definitions of products in which innovators can claim property rights.

The United States will increasingly earn its living in the technical fields in which these unconventional kinds of property are crucial. In enacting the Semiconductor Chip Protection Act, Congress demonstrated the sort of contribution that it can usefully make to a rising and immensely promising industry.